Crude Oil

## 1. Current Market Conditions

As of the close on Friday, July 18, international oil prices saw a round of sharp surges. WTI crude oil futures closed at **$82.49 per barrel**, up **$3.54** on the day (**+4.48%**), and climbed **14.35%** for the week. Brent crude oil futures closed at **$88.10 per barrel**, up **$3.87** on the day (**+4.59%**), and rose **15.91%** for the week. Brent ended higher for the third consecutive week, while WTI rose for the second straight week, with both single-week gains reaching their largest levels since April.

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## 2. Core Drivers: Geopolitical Premium Rapidly Reemerges

The key driving force behind this round of oil-price spikes is the renewed escalation of the **U.S.-Iran conflict**. Axios reported that the U.S. is dispatching dozens of air refueling tankers to **Israel**, strengthening expectations that the conflict could further escalate in the near term. Previously, **Iran** attacked Kuwait’s water and power plants, damaging multiple power generator sets, while the U.S. has launched airstrikes against **Iran** for the seventh consecutive night.

The market’s most pressing concern is the **Strait of Hormuz**—about one-fifth of the world’s oil is transported through this chokepoint. As **Iran** has carried out maritime attacks on vessels passing through the strait, the strait’s traffic volume has fallen significantly over the past 10 days. Shipping companies are growing increasingly cautious, and expectations of supply disruptions are rapidly intensifying.

In addition, after Ukraine attacked Russian refineries, **Russia**’s crude oil exports fell sharply, and U.S. senators also released the text of a bill to impose sanctions on Russian oil buyers. With multiple supply shocks overlapping, oil prices have strongly broken higher.

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## 3. Supply and Demand Fundamentals: A Divergence Between Near-Term Tightness and Long-Term Oversupply

In the short term, the market is facing a structural shortage. **TD Securities** expects a deficit of approximately **2.5–3.0 million barrels per day** in the crude oil market in **July and August**. Global inventories, excluding China, are already below the lowest level in the past **10 years**. The refined products market is even tighter than crude oil, and refiners’ profit margins have risen to record highs.

However, long-term pressure cannot be ignored. The “**OPEC+**” group’s **seven** core member countries have agreed to increase production quota again in **August** by **188,000 barrels per day**, with the output cut measures exiting as early as **September** at the fastest. In addition, non-OPEC oil producers such as the **U.S.** and **Brazil** continue to raise output (with the expected average daily increase in **2026** of about **1.15 million barrels**), while the **IEA** expects global oil demand in **2026** to contract year over year by about **1.10 million barrels per day**. Once the geopolitical situation eases, the market logic will inevitably shift from wartime supply shortages toward supply-demand rebalancing.

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## 4. Technical Analysis and Overall Outlook

WTI has broken above both the **23.6% Fibonacci** retracement level from April to July’s decline and the **200-day EMA**, and technical indicators have fully turned bullish. Initial resistance above is at **$82.40** (**38.2% Fibonacci**), with stronger resistance near **$87**. Downside support is at **$77.23** (**200-day EMA**).

In the short term, geopolitical premium is driving the market; with market panic, bearish positions are unlikely to hold through next weekend. In the medium term, the direction of oil prices depends on how the **U.S.-Iran conflict** evolves—if the situation spirals further out of control, Brent is expected to challenge the **$90–$92** range; if tensions ease, oversupply pressure will once again take the lead, and oil prices face downside risk. Crude oil is currently caught in a fierce standoff between geopolitics and supply-demand fundamentals. #夏日创作营